MORGAN JONES, individually and on behalf of all others similarly situated, Plaintiff,
JUDGE TECHNICAL SERVICES INC., Defendant.
Mitchell S. Goldberg, J.
Plaintiff, Morgan Jones, initiated this purported collective action against Defendant, Judge Technical Services Inc., for violations of the Fair Labor Standards Act, 29 U.S.C. § 201 et seq. (“FLSA”). Plaintiff’s primary contention is that Defendant misclassified him and other employees as exempt from the FLSA’a overtime provisions under 29 U.S.C. § 213(a)(17) (the FLSA’s computer-employee exemption), and subsequently failed to pay them overtime compensation.
Several motions are currently before the Court: Defendant’s motion for sanctions (Doc. No. 83); Defendant’s motion for partial summary judgment (Doc. No. 73); and Plaintiffs’ motion to issue notice to similarly situated individuals (Doc. No. 67). For the reasons set forth below, Defendant’s motion for sanctions will be granted in part, but not based upon sanctionable conduct; Defendant’s motion for partial summary judgment will be denied; and Plaintiffs’ motion to issue notice to similarly situated individuals will be granted.
I. FACTUAL AND PROCEDURAL HISTORY
Unless otherwise indicated, the following facts are undisputed:
Defendant Judge Technical Services, Inc. is a staffing company that places individuals with specialized technical knowledge into temporary employment positions. Placement is effectuated through recruiters, who locate individuals and match them with available job opportunities. Once placed in a position, the individual remains the employee of Defendant, rather than the business for which the individual performs work. Since November 2008, Defendant has placed thousands of individuals in positions in approximately forty states. (Def.’s Stmt. of Undisputed Facts ¶¶ 1–2, 6.)
Defendant maintains a variety of pay structures for its employees. The pay structures at issue are the “Professional Day” and “Professional Week” agreements, which apply only to employees who Defendant has classified as exempt under the FLSA’s computer-employee exemption. Under the “Professional Day” agreement, an employee “will not be paid for more than eight hours in a day, unless that employee works more than ten hours in a day. If the employee works more than ten hours in a day and the manager approves, the employee will be entitled to be paid an additional fee for services provided after the 11th hour.” Under the “Professional Week” plan, employees receive a set hourly rate for every hour worked up to forty hours per week, and receive no additional compensation for hours worked in excess of forty hours per week. (Id. at ¶¶ 10, 15-18) (alterations omitted). Defendant considers employees designated under either structure as exempt under § 213(a)(17).
Plaintiff Morgan Jones initially contacted Defendant through one of its recruiters, Robert Helsel. In July 2011, Defendant successfully placed Plaintiff in a position as Senior Project Manager with Citigroup. When Plaintiff started at Citigroup, he was classified by Defendant as exempt from the FLSA’s overtime requirements under 29 U.S.C. § 213(a)(17) and was subject to Defendant’s “Professional Day” pay plan. (Id. at ¶¶ 20, 27, 30-31, 51.)
Like Defendant’s other employees, Plaintiff was required to enter his daily hours into Defendant’s “EaZyTyme system, ” an online-based time reporting system maintained and controlled by Defendant. In addition to reporting his time in EaZyTyme, Plaintiff also reported his work hours directly to Citigroup for purposes of effectuating payment from Citigroup to Defendant for Plaintiff’s work. During his placement with Citigroup, Plaintiff routinely worked over forty hours per week and occasionally over fifty hours per week. (Id. at ¶¶ 39-40, 46, 52.) Beginning on November 14, 2011, Plaintiff was taken out of the Professional Day structure and paid on an hourly basis. (Id. at ¶¶ 13-14, 56-57.)
On November 3, 2011, Plaintiff filed the purported FLSA collective action and subsequently filed a “Motion to Issue Notice to Similarly Situated Persons Pursuant to 29 U.S.C § 216(b).” Defendant filed its response in opposition to Plaintiff’s motion on January 22, 2013, and the next day filed a “Motion for Partial Summary Judgment.” Plaintiff’s response to this motion was filed on February 22, 2013. Attached to Plaintiff’s response was the declaration of Judith Kramer, a former attorney with the United States Department of Labor. On February 28, 2013, Defendant filed a “Motion for Sanctions Pursuant to Rule 37 in Respect to the Declaration of the Putative Expert Judith Kramer.”
On April 4, 2013, oral argument was held. The motions are fully briefed and ready for disposition. We address each in turn.
II. DEFENDANT’S MOTION FOR SANCTIONS
In its motion for sanctions, Defendant requests that the Court strike the declaration of Judith Kramer, which is attached to Plaintiff’s response in opposition to Defendant’s motion for partial summary judgment. Defendant also request that fees and costs be awarded. Defendant asserts that Plaintiff violated his discovery obligations by failing to disclose Kramer as a witness under Federal Rules of Evidence 26(a)(1) and 26(e), and that this failure is prejudicial because it deprived Defendant of the opportunity to depose Kramer during the discovery period. Defendant urges that we exclude Kramer’s declaration because it merely offers a legal conclusion and is thus inadmissible. (Def.’s Br. in Support of Mot. for Sanctions 4, 5-9.)
Plaintiff responds that this Court’s September 14, 2012 Scheduling Order made no mention of expert discovery deadlines,  and that Kramer was retained as an expert less than two weeks before her declaration was attached to his response. Plaintiff acknowledges that he did not supplement his initial disclosures or interrogatory answers to identify Kramer as an expert before he filed his response, but notes that he offered to supplement his initial disclosures and discovery responses, produce Kramer for deposition and support a request to extend the summary judgment briefing schedule to allow Defendant to submit a reply brief addressing the declaration. Plaintiff also posits that Kramer’s declaration is admissible because it is based on specialized knowledge that will assist the Court in its determination of liability. (Pl.’s Br. in Opp’n to Def.’s Mot. for Sanctions 3-4, 6-7, 9-14.)
A. Legal Standards
Federal Rule of Civil Procedure 37(c)(1) permits a court to exclude evidence and impose sanctions where a party “fails to provide information or identify a witness as required in Rule 26(a) or (e).” Under such circumstances, the non-producing party “is not allowed to use [the undisclosed] information or witness to supply evidence on a motion, at a hearing, or at a trial” unless it demonstrates that its conduct was substantially justified or is harmless. Fed.R.Civ.P. 37(c)(1); Waites v. Kirkbride Ctr., 2012 WL 3104503, at *6 (E.D. Pa. July 30, 2012). The imposition of sanctions for abuse of discovery under Rule 37 is within the sound discretion of the trial court. Newman v. GHS Osteopathic, Inc., Parkview Hosp. Div., 60 F.3d 153, 156 (3d Cir. 1995).
In determining whether to exclude evidence, a district court must consider the following factors: (1) the prejudice or surprise of the party against whom the excluded evidence would have been admitted; (2) the ability of the party to cure that prejudice; (3) the extent to which allowing the evidence would disrupt the orderly and efficient trial of the case or other cases in the court; and (4) bad faith or willfulness in failing to comply with a court order or discovery obligation. Nicholas v. Pa. State Univ., 227 F.3d 133, 148 (3d Cir. 2000). The United States Court of Appeals for the Third Circuit has cautioned that exclusion of evidence is an “extreme sanction” for a violation of a discovery order. In re TMI Litig., 193 F.3d 613, 621 (3d Cir. 1999).
In cases where the timeliness of disclosing expert identities and reports is at issue, a request for exclusion is typically granted only where the trial date is fast approaching. Ciocca v. BJ.’s Wholesale Club, Inc., 2011 WL 3563560, at *5 (E.D. Pa. Aug. 12, 2011); see also Womack v. Smith, 2012 WL 1245752, at *10 (M.D. Pa. Apr. 13, 2012) (excluding testimony of lay witnesses where trial was “mere weeks” away); Klatch-Maynard v. Sugarloaf Twp., 2011 WL 2006424, at *3-*5 (M.D. Pa. May 23, 2011) (excluding testimony where expert reports were filed “on the eve of trial” and over three-and-a-half years after the deadline for expert reports passed). Further, with respect to the final Nicholas element, bad faith conduct in the context of untimely expert disclosures is generally only found where the conduct could be deemed to have been done “to gain a tactical advantage.” Ciocca, 2011 WL 3563560, at *5 (citing Konstantopoulos v. Westvaco Corp., 112 F.3d 710, 720-21 (3d Cir. 1997)). Questionable practices or conduct on counsel’s part by “failing to communicate” with the court or opposing counsel typically do not “rise to the level of bad faith.” Id. at *5.
Even where there is no discovery violation, an expert declaration can be excluded if it falls outside the permissible scope of Federal Rule of Evidence 702. See Countryside Oil Co., Inc. v. Travelers Ins. Co., 928 F.Supp. 474, 482 (D.N.J. 1995) (noting that only evidence which is admissible at trial may be considered in ruling on a summary judgment motion). This determination is also left to the discretion of the trial court. United States v. Leo, 941 F.2d 181, 196 (3d Cir.1991). In exercising this discretion, the court “must ensure that an expert does not testify as to the governing law of the case.” Berckeley Inv. Grp., Ltd. v. Colkitt, 455 F.3d 195, 217 (3d Cir. 2006).
Although Federal Rule of Evidence 704(a) allows an expert witness to give expert testimony that embraces an ultimate issue to be decided by the trier of fact, an expert witness is prohibited from rendering a legal opinion. Id. This standard is no different for a witness who is qualified as an expert and is also an attorney. Haberern v. Kaupp Vascular Surgeons Ltd. Defined Benefits Plan & Trust Agreement, 812 F. Supp. 1376, 1378 (E.D.Pa.1992) (holding that expert testimony as to whether employer’s practice violated ERISA was an inadmissible legal conclusion). Ultimately, district courts prohibit experts from offering legal opinions because such testimony is not helpful to the trier of fact. See Leo, 941 F.2d at 197. In other words, an expert’s legal opinion is prohibited when “it would usurp the District Court’s pivotal role in explaining the law to the jury.” Berckeley, 455 F.3d at 217.
B. Analysis – The Judith E. Kramer Declaration
We need not rule upon Defendant’s request that we exclude the Kramer declaration due to discovery violations because we find that Kramer’s declaration is inadmissible as improperly offering a legal opinion. The declaration is used to support Plaintiff’s legal interpretation of the computer-employee exemption, which is a question of law for the Court to decide. Further, the declaration provides impermissible legal conclusions rather than evidence that would assist the trier of fact in determining a fact at issue. Therefore, we will not consider Kramer’s declaration in evaluating Defendant’s motion for partial summary judgment.
We note that even if we were to find that Plaintiff’s failure to immediately supplement his disclosures to identify Kramer violated Rule 26(e), exclusion of the declaration may not be warranted under Rule 37. A trial date has not been set nor is it clear that Plaintiff’s failure to supplement was willful or in bad faith. Indeed, Plaintiff offered to cure any prejudice by supplementing his initial disclosures and discovery responses, produce Kramer for deposition and consent to a request to extend the summary judgment briefing schedule to allow Defendant to submit a reply brief addressing Kramer’s declaration.
III. DEFENDANT’S MOTION FOR PARTIAL SUMMARY JUDGMENT
Defendant has filed four counterclaim causes of action: Computer Fraud and Abuse; Common Law Fraud; Breach of Fiduciary Duty; and Conversion. Defendant has moved for partial summary judgment on its counterclaims for fraud and conversion, and on Plaintiff’s retaliation and FLSA claims. We address each argument in turn.
A. Legal Standard – Summary Judgment
Under Federal Rule of Civil Procedure 56(a), summary judgment is proper “if the movant shows that there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law.” An issue is “genuine” if there is sufficient evidentiary basis on which a reasonable jury could return a verdict for the non-moving party. Kaucher v. Cnty of Bucks, 455 F.3d 418, 423 (3d Cir. 2006) (citing Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986)). A factual dispute is material if it might affect the outcome of the case under governing law. Id. (citing Anderson, 477 U.S. at 248). Under Rule 56 the court must view evidence in the light most favorable to the nonmoving party. Galena v. Lone, 638 F, 3d 186, 196 (3d Cir. 2011). However, “unsupported assertions, conclusory allegations or mere suspicions” are insufficient to overcome a motion for summary judgment. Schaar v. Lehigh Valley Health Servs., Inc., 732 F.Supp.2d 490, 493 (E.D. Pa, 2010) (citing Williams v. Borough of W. Chester, Pa., 891 F.2d 485, 461 (3d Cir. 1989)).
The movant “always bears the initial responsibility of informing the district court of the basis for its motion, and identifying those portions of [the record] which it believes demonstrates the absence of a genuine issue of material fact.” Celotex Corp. v. Cartrett, 477 U.S. 317, 323 (1986). Where the non-moving party bears the burden of proof on a particular issue at trial, the moving party’s initial Celotex burden can be met by showing that the non-moving party has “fail[ed] to make a showing sufficient to establish the existence of an element essential to that party’s case.” Id. at 322.
After the moving party has met its initial burden, summary judgment is appropriate if the non-moving party fails to rebut the moving party’s claim by “citing to particular parts of material in the record, including depositions, documents, electronically stored information, affidavits or declarations, stipulations . . ., admissions, interrogatory answers, or other materials” that show a genuine issue of material fact or by “showing that the materials cited do not establish the absence or presence of a genuine dispute.” Fed.R.Civ.P. 56(c)(1)(A)-(B). Only evidence ...